The Queensland Government in Australia has announced that it will sell a A$1.5bn ($1.53bn) stake in coal-freight firm QR National (QRN), reducing its stake from 34% to 16%.
Around A$1bn ($1.02bn) of shares will be sold through a selective buyback to QR National, as well as a A$500m ($510m) placement to a small number of investors.
Queensland treasurer Tim Nicholls said that the deal was good for Queenslanders because the sale would see more government debt paid off.
"The LNP (Liberal National Party) opposed the former Labour government’s decision to sell QR National, however we now have an obligation to Queenslanders to achieve the best possible outcome from the situation we inherited," Nicholls said.
The divestment has corresponded to a gain of A$400m ($408m) to the state’s bottom line since the initial public offer.
According to the government, profits from the selective buyback are subject to shareholder approval at the QRN Annual General Meeting, scheduled to take place on 21 November 2012.
Profits from the cornerstone placement are expected to be received on 11 October 2012.
After the divestment of the stake, the Queensland Government’s remaining stake in QR National will be worth around $1.35bn.
Image: The A$1.5bn sale will reduce the Queensland’s holding in QR National from 33.9% to 16%. Photo: courtesy of QR National.